ToplineJet fuel prices are back on the rise after leveling off in June, throwing a wrench into airlines’ best-laid plans and signaling the likelihood of another round of airfare hikes later this summer or fall.The re-escalation of the Iran war has sent jet fuel prices soaring.gettyKey Facts“I think $200 a barrel is feasible if all hell breaks loose in the Middle East, which looks like it is going to be happening,” John Gradek, who teaches aviation risk management at McGill University, told Forbes, noting, “the strategic reserves [of jet fuel] we’ve had in the U.S. and in Europe and in China have been gobbled up.”The Dow Jones U.S. Airlines Index is down 15% since July 1, when the U.S. and Iran opened a direct communication channel but ultimately failed to salvage the ceasefire.American Airlines cut its 2026 outlook, citing higher fuel costs, a sign that current elevated fares won’t be enough to fully offset this year’s spike in fuel prices. Southwest Airlines, which also downgraded its full-year forecast, sent 12.6 million gallons of jet fuel through the Panama Canal to Los Angeles this spring in case of fuel shortages, the carrier’s chief financial officer told CNBC.Airline ticket prices were 26.5% higher last month than June 2025, according to the US Travel Association’s Travel Price Index.Crucial Quote “Just three weeks ago, we were expecting to guide to full-year pre-tax earnings approaching $1.5 billion, approximately four times our 2025 pre-tax income,” American Airlines CFO Devon May told investors on the second-quarter earnings call, noting the carrier gets “around 65% [of jet fuel] supplied from the Gulf.” Should Travelers Expect Higher Airfares Later This Summer?“We’ve had eight straight months of incremental airfare hikes—small, 2% or 3% at a time, but that compounds and now we’re sitting at fares that are 27% higher than this time last year,” Katy Nastro, spokesperson for the airfare deal-finding app Going, told Forbes. “I would bet money that airfares continue to climb.” She speculated that while fares typically drop during shoulder season, after the summer peak, “this year we’re maybe not going to see that.” Gradek agreed that “airfares are definitely not coming down” but he isn’t convinced airlines will be able to raise fares any further once summer turns to autumn. “Demand’s going to fall off, as it always does,” he said. “You can’t keep raising your prices in a falling-demand world.”High Jet Fuel Prices Pummel Airline Profits in 2026The price of jet fuel, which typically accounts for up to 30% of a carrier’s overall costs, has increased dramatically during the five-month blockade of the Strait of Hormuz, wiping billions of dollars from U.S. airlines’ bottom lines. On its July earnings call, Delta Air Lines CEO Ed Bastian told investors the carrier had absorbed “the highest quarterly fuel expense in our history” and would likely spend $2 billion more on jet fuel this year than last. United Airlines noted on its second-quarter earnings call its fuel bill was up $2.3 billion—or 84% year over year—in the quarter, and it expects to spend $6 billion in additional fuel costs for the full year. Alaska Airlines reported fuel expenses of $1.3 billion in the second quarter—up 85% from a year ago—and said it lost almost $500 million in the first half of the year. Southwest Airlines’ $900 million fuel bill in the second quarter dampened its summer forecast though the carrier increased airfares and baggage fees to offset fuel costs. “Unlike traditional times when fundamentals dictate price movements, this situation is completely geopolitical,” Patrick De Haan, head of petroleum analysis at Gas Buddy, told Forbes, stressing that besides the Strait of Hormuz blockade, Ukraine has been regularly attacking Russian refineries. “Now we’ve got two uncertainties, and that will make it all the more difficult to have a predictable, rational market because it’s just too filled with the unknown right now.” The odds of the worst-case scenario “keep climbing every day,” Gradek told Forbes. “If the rhetorical stuff doesn't stop and we get progressive escalation, aviation fuel prices will go through the roof. It won't happen overnight. But it'll show up within the next few weeks.”TangentOil refineries, meanwhile, are doing a roaring business. “Refinery profitability has reached record-setting levels,” De Haan told Forbes. “In part because there are fewer refineries able to take oil and turn it into valuable commodities like jet fuel.”Further ReadingOil Nears $100 Per Barrel Again As Iran-Backed Houthis Target Red Sea Shipping (Forbes)Why Airfares Won’t Likely Drop This Summer (Forbes)